Share Name Share Symbol Market Type Share ISIN Share Description
Bmr Group LSE:BMR London Ordinary Share GB00BWV0F181 ORD GBP0.01
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  +0.025p +1.25% 2.025p 1.90p 2.15p 2.025p 2.00p 2.00p 500,261 14:00:18
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Mining 0.0 -1.6 -0.9 - 4.83

BMR Group PLC Final Results

28/12/2017 7:00am

UK Regulatory (RNS & others)


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RNS Number : 3967A

BMR Group PLC

28 December 2017

BMR Group PLC

("BMR" or the "Company")

2017 Final Results

The Company releases its full year results for the year ended 30 June 2017 ("Results"). The Results will be available on the Company's website, www.bmrplc.com, shortly.

For further information:

   BMR Group PLC                                                 020 7734 7282 

Alex Borrelli, CEO and Chairman

   WH Ireland Limited                                            020 7220 1666 

NOMAD and Joint Broker

Chris Fielding, Head of Corporate Finance

Alex Bond, Executive

   Peterhouse Corporate Finance                         020 7469 0930 

Joint Broker

Lucy Williams/ Duncan Vasey/ Heena Karani

This announcement contains inside information for the purposes of Article 7 of Regulation 596/2014.

Note: This announcement has been reviewed by Geoff Casson, B.Sc. (Hons), PhD, R Eng (Zambia), Member Engineering Institute of Zambia (Metallurgy), General Manager of the Company's Zambian subsidiary, Enviro Processing Ltd, who is a Qualified Person in accordance with the guidance note for Mining, Oil & Gas Companies issued by the London Stock Exchange in respect of AIM Companies.

CHAIRMAN'S STATEMENT

I am pleased to present below the financial statements of the Company for the year ended 30 June 2017.

On one level, we are making good progress towards our principal strategic objective of completing the construction of the Kabwe plant. On another level, we are disappointed with the delay in securing funds from African Compass International ("ACI"), further to the agreement reached last year. This delay has significantly impacted upon our timing for construction, our working capital position and therefore our market valuation. I have previously alerted shareholders to construction delays. However, we expect to make up ground in recovering our shareholder value as we conclude the agreements which are under advanced discussions relating to the Kabwe plant with Jubilee Platinum Plc (Jubilee) and to Star Zinc with Galileo Resources Plc (Galileo).

Despite these challenges, the BMR team has successfully completed the design of the five tonnes per hour plant and started plant construction with the intention of producing, initially, zinc sulphate heptahydrate and lead sponge. Later additions to the plant are intended to add capacity to produce zinc cathodes and vanadium pentoxide.

Kabwe plant and Agreement with Jubilee

We concluded during the year that the construction of the Kabwe plant would be best secured for the benefit of the Company by finding an appropriate partner which would in effect underwrite both the cost and contribute to the construction of the plant and complement our processing methodology and operating capability. Accordingly, we reached an agreement in October 2017 with Jubilee, a c.GBP40 million market value AIM company engaged in mining exploration and development with an African focus, which has a high degree of technical, operational and managerial experience. Jubilee is currently undertaking a technical due diligence review and we were pleased to note the positive comments made by Jubilee in November as to its confidence in the prospects for the Kabwe plant and its successful completion, commissioning and subsequent operation.

Under the terms agreed with Jubilee, BMR retains its 100% interest in the Kabwe Large Scale Mining Licence and the mine tailings assets, while Jubilee has the option to provide up to GBP2.3 million of debt finance towards the construction of the Kabwe plant upon agreement of the work programme and legal documentation, to be completed by no later than 28 February 2018. BMR will retain a minimum of 60% of the economic interest in the long term post-tax profits of Kabwe operations. BMR and Jubilee are targeting completion of the construction and commissioning of the Kabwe plant by 30 June 2018 and commencement of operations and revenue generation thereafter.

At the same time, included in the agreement with Jubilee will be the processing for selective recovery and production of vanadium pentoxide at the Kabwe plant. The design of the recovery circuit for vanadium pentoxide is well advanced; however, this addition to the plant will require approval from the Zambia Environmental Management Agency (ZEMA), The Company has been advised by ZEMA that approval by way of an Environmental Project Brief (EPB) would be considered acceptable, being less onerous than a full Environmental Social and Impact Assessment study (ESIA). Historic records for the Kabwe mine indicate substantial tonnages of contained vanadium pentoxide are present in the Wash Plant Tailings (WPT), the Leach Plant Residues (LPR) and the Imperial Smelting Furnace Slag (ISFS) which are amenable to recovery.

Facility agreement with ACI

We have given considerable latitude to ACI to fulfil its commitments to the Company under the terms of the facility agreement in terms of timing, while Jeremy Hawke has made, and continues to make, extensive efforts on an almost daily basis to secure the funding from our drawdown requests, without success. This delay has significantly impacted upon our timing for plant construction, our working capital position and therefore other areas of our business.

Although BMR reserves all rights against ACI for its significant breach of the terms of the facility agreement, the Board will evaluate and monitor the progress of getting the required funding from ACI in the coming months.

In the event that a significant proportion of ACI's funding materialises and before we have entered into the agreements with Jubilee, we would be in a position to consider financing for adding capacity to the processing plant and the production of vanadium pentoxide, once ZEMA's approval is obtained, as well as having necessary working capital for the Company. Furthermore, we would then be in a position to reconsider the off take agreement for zinc sulphate heptahydrate after entering into the agreements with Jubilee.

Agreements relating to the Large Scale Prospecting Licence 19653 - HQ - LPL ("Star Zinc") and Galileo

In August 2017, we entered into a binding term sheet with Galileo, a UK based resource company quoted on AIM, which established the framework for an agreement to process the resource from Star Zinc at the Kabwe plant.

Under the terms agreed, Galileo advanced to BMR $591,600 which was applied in the acquisition of Star Zinc and which will be converted by Galileo into 51% in a joint venture company. We expect to conclude a formal joint venture agreement with Galileo following the transfer of the mining licence. Galileo will then undertake an 18 month work programme at a cost of $250,000, (in respect of which it has placed $100,000 in escrow) using reasonable endeavours to complete a preliminary economic assessment of Star Zinc ("PEA"), following which further new shares will be issued to Galileo to increase its aggregate equity interest in the joint venture company to 85%. BMR has the right to increase its interest in the joint venture company back to 25% on payment of $150,000 to Galileo within 90 days of the date of completion of the joint venture agreement (failing which the $100,000 in escrow is released to BMR).

We have also agreed to enter into the proposed off take agreement referred to above for ore from Star Zinc to be processed at Kabwe, such terms to be determined as soon as reasonably practicable following completion of the PEA to reflect capacity requirements for the production of zinc from Star Zinc, as well as relevant grade and resource life of the project set out in the PEA. BMR intends to process Star Zinc ore in conjunction with its Leach Plant Residues.

We have to pay the outstanding instalment of $170,000 for the Star Zinc acquisition by 28 February 2018.

Kashitu Exploration, Zambia

We were pleased to announce in October 2017 a positive update on our exploration work in the Kashitu section of our Large Scale Mining Licence. Four phases of auger drilling were successfully completed, resulting in a total of 450 soil samples being assayed primarily for zinc, lead and silver mineralisation. Our combined data base of results has enabled the Company to identify a central, mineralised 'core' in the south east of Kashitu, approximately 300 metres x 400 metres with Zn grades between 1% and 40%, Pb between 1% and 18%, and Ag up to 16.8 grams/tonne.

Based on these encouraging results, the exploration campaign has now been extended into an area further east, designated the 'Dambo', to investigate any potential accumulated mineralisation from the central mineralised 'core', into which it drains. We also intend to undertake a RAB drilling programme to investigate the extent of near surface mineralisation.

Waelz Kiln Slag ("WKS"), Zambia

Following ZEMA's rejection of the Environmental Project Brief application and a lack of progress with the Company's subsequent appeal to sell WKS for block making, discussions were held with ZEMA to explore alternative, acceptable solutions for the use of WKS. As a result, the Company has now successfully completed preliminary investigative test work to incorporate WKS into the production of high performance cement for civil engineering structures. Negotiations are currently being held with a major cement manufacturer in Zambia to undertake a joint engineering study to pursue this option.

Imperial Smelting Furnace Slag ("ISFS"), Zambia

We expect to finalise our metallurgical test work designed to blend the ISFS with the processing of the leach plant residues at the Kabwe plant, following execution of the joint venture agreement with Jubilee.

ISFS and Vanadium JORC Compliant Resource Studies

We have previously stated the Company will commission a full-JORC compliant survey of the ISFS.

As part of this survey, it is also intended to add vanadium as a JORC compliant resource to the WPT, LPR and ISFS. This entails establishing the ability to recover economically vanadium from these residues for which we have now submitted a scope of works to Alfred Knight Laboratories and await their fee estimates.

Ester Project, Portugal

The Ester licence hosts the historic Regoufe and Rio Frades tungsten/tin mines. During the past 12 months, BMR and our partner, Mineralia Minas, Geotecnia E Construcoes, LDA ("Mineralia") have successfully completed a geological field campaign focused particularly on the area close to the Regoufe Mine. Scoping metallurgical test work carried out by Grinding Solutions using 80 kgs of samples collected during the first field campaign has successfully defined a conceptual flow sheet, recovering WO3 (tungsten trioxide), Sn (tin), Au (gold) and Ag (silver), using a combination of heavy media separation, gravity separation, flotation and leaching. Fresh samples which have now been delivered will be used to refine the flow sheet and further investigate the effects on recovery of grind size, extended rate kinetics, open circuit trials and cyanide leach for the recovery of Au.

We have fulfilled our EUR140,000 (c.GBP120,000) financial obligation on the project and have informed Mineralia that we intend to exercise shortly the option to secure 80% in a new joint venture company. Further consideration will be due to Mineralia of EUR100,000 (c.GBP90,000) upon the application and granting of a preliminary exploitation licence by no earlier than 2019 and EUR1,000,000 (c.GBP880,000) upon the application and granting of a definitive exploitation licence thereafter.

Working capital, fund raisings and other matters

BMR remains under very tight financial control with minimal overhead as our focus continues to be to deploy the required cash primarily to the Kabwe plant construction.

During the year, while experiencing significant delays in securing the funding from ACI, we entered into discussions with alternative funders but concluded their terms were too onerous for the Company.

In order to secure funds for our ongoing construction at the Kabwe plant, we raised GBP620,000 before expenses in October 2016, a further GBP414,000 before expenses from the exercise of warrants in February 2017 and a further GBP800,000 in November 2017 to secure funding for the Star Zinc acquisition and for working capital purposes.

We continue the litigation pursuit against former associates and advisers to the Company and believe we are close to achieving a successful outcome.

We remain in discussions with HMRC on our appeal against the de-registration of the Company for VAT purposes.

Results for the year

The Company reported a loss before taxation for the year of GBP1.6 million (2016: GBP1.1 million) after administrative expenses of GBP1.5 million (2016: GBP1.1 million). Exchange translation differences on foreign operations were GBP158,000 (2016: GBP1.76 million).

Consolidated net assets at 30 June 2017 amounted to GBP10.23 million (2016: GBP10.35 million) including cash and cash equivalents of GBP155,000 (2016: GBP1.01 million).

AGM and Resolutions

The resolutions for the forthcoming Annual General Meeting will be contained in a separate Notice which will be made available to shareholders in early January 2018 and on the website www.bmrplc.com. The Directors recommend shareholders to vote in favour of all the resolutions and a form of proxy is being despatched to all shareholders for this purpose.

The AGM will be held at 11.00 a.m. on Wednesday 31 January 2018.

Outlook

We remain very positive about prospects for the successful completion and commissioning of the Kabwe plant in 2018, particularly having secured the interest of a major partner in Jubilee and we look forward to successful conclusion of the joint venture and operating agreements with Jubilee.

In addition, we have successfully secured the Star Zinc acquisition together with our partner, Galileo. We expect to conclude terms with Galileo for a joint venture agreement for the mining of the ore and also an off take agreement for the processing of the ore from Star Zinc to enrich our production at Kabwe.

We have also completed our financial commitments to secure the majority interest in the Ester project in Portugal which we believe has the potential for significant long-term value creation.

We have been particularly disappointed with ACI's lack of deliverability which inter alia has resulted in us having to secure equity funding at valuations well below what we believe to be an appropriate valuation of the Company.

We remain committed to the success of the Kabwe plant and our efforts will remain focused on delivering positive results for our shareholders.

Alex Borrelli

Executive Chairman

INDEPENT AUDITOR'S REPORT TO THE MEMBERS OF

BMR GROUP PLC

Opinion

We have audited the financial statements of BMR Group plc (the "Parent Company") and its subsidiaries (the "Group") for the year ended 30 June 2017, which comprise:

   --      the Group statement of comprehensive income for the year ended 30 June 2017; 
   --      the Group and parent company statements of financial position as at 30 June 2017; 
   --      the Group and parent company statements of cash flows for the year then ended; 
   --      the Group and parent company statements of changes in equity for the year then ended; and 

-- the notes to the financial statements, including a summary of significant accounting policies.

The financial reporting framework that has been applied in the preparation of the financial statements is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union and, as regards the parent company financial statements, as applied in accordance with the provisions of the Companies Act 2006.

In our opinion:

-- the financial statements give a true and fair view of the state of the Group's and of the Parent Company's affairs as at 30 June 2017 and of the Group's loss for the year then ended;

-- the group financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union;

-- the parent company financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union as applied in accordance with the provisions of the Companies Act 2006; and

-- the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Material uncertainty related to going concern

We draw attention to Note 3 which indicates that further funding will be required to finance the Group's pre-production programme in Zambia and the other office overheads. The Directors are confident that the Company will be able to raise these funds however there is no binding agreement in place to date.

These conditions indicate the existence of a material uncertainty and may cast doubt on the Group and Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter. The financial statements do not include the adjustments that would result if the Group and Company were unable to continue as a going concern.

Overview of our audit approach

Materiality

In planning and performing our audit we applied the concept of materiality. An item is considered material if it could reasonably be expected to change the economic decisions of a user of the financial statements. We used the concept of materiality to both focus our testing and to evaluate the impact of misstatements identified.

Based on our professional judgement, we determined overall materiality for the Group financial statements as a whole to be GBP280,000 (2016: GBP220,000), based on 2% of Group total assets.

We use a different level of materiality ('performance materiality') to determine the extent of our testing for the audit of the financial statements. Performance materiality is set based on the audit materiality as adjusted for the judgements made as to the entity risk and our evaluation of the specific risk of each audit area having regard to the internal control environment.

Where considered appropriate performance materiality may be reduced to a lower level, such as, for related party transactions and directors' remuneration.

We agreed with the Audit Committee to report to it all identified errors in excess of GBP8,400 (2016: GBP6,600). Errors below that threshold would also be reported to it if, in our opinion as auditor, disclosure was required on qualitative grounds.

Overview of the scope of our audit

Whilst the Parent Company's activity and accounting is in London, the main activity of the Group are accounted for from its main operating location in Kabwe, Zambia.

In establishing our overall approach to the Group audit, we determined the type of work that needed to be undertaken at each of the components by us, as the primary audit engagement team. For the full scope components in Kabwe, Zambia, where the work was performed by component auditors, we determined the appropriate level of involvement to enable us to determine that sufficient audit evidence had been obtained as a basis for our opinion on the Group as a whole.

The primary team led by the Senior Statutory Auditor was ultimately responsible for the scope and direction of the audit process. The primary team interacted regularly with the component teams where appropriate during various stages of the audit, reviewed key working papers and were responsible for the scope and direction of the audit process. This, together with the additional procedures performed at Group level, gave us appropriate evidence for our opinion on the Group financial statements.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified. These matters included those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

In addition to the matter described in the 'Material uncertainty related to going concern' section, we have determined that the key audit matter was.

 
  Key audit matter       How the scope of our audit 
                          addressed the key audit matter 
=====================  ===================================== 
  Carrying value of      The carrying value of development 
   development assets     assets as at 30 June 2017 
                          is GBP11million. 
 
                          The assessment of the carrying 
                          value requires management 
                          to exercise judgement as 
                          described in the 'critical 
                          accounting judgements' section 
                          of the financial statements 
                          on page 41. Management's 
                          assessment requires consideration 
                          of a number of factors, including 
                          but not limited to, the group's 
                          intention to proceed with 
                          a construction of Kabwe processing 
                          activity and the funding 
                          requirements to undertake 
                          this construction. Recoverability 
                          of non-current assets is 
                          dependent on macroeconomic 
                          assumptions and estimates 
                          about future metal price, 
                          inflation, discount and exchange 
                          rates as well as forecast 
                          assumptions related to future 
                          production levels, reserves 
                          and operating costs. 
 
                          We evaluated management's 
                          assessment of indicators 
                          of impairment and recoverability 
                          assessment for the Group's 
                          non-current assets. 
 
                          We are satisfied that the 
                          recoverability of the assets 
                          has been assessed in accordance 
                          with the requirements of 
                          impairment of assets, subject 
                          to the matter noted in respect 
                          of going concern assumption. 
=====================  ===================================== 
 

Our audit procedures in relation to this matter were designed in the context of our audit opinion as a whole. They were not designed to enable us to express an opinion on this matter individually and we express no such opinion.

Other information

The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor's report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinion on other matter prescribed by the Companies Act 2006

In our opinion based on the work undertaken in the course of our audit

-- the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-- the directors' report and strategic report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

-- adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

-- the parent company financial statements are not in agreement with the accounting records and returns; or

   --      certain disclosures of directors' remuneration specified by law are not made; or 
   --      we have not received all the information and explanations we require for our audit. 

Responsibilities of the directors for the financial statements

As explained more fully in the directors' responsibilities statement [set out on page xx], the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group's and parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Leo Malkin

Senior Statutory Auditor

For and on behalf of

Crowe Clark Whitehill LLP

Statutory Auditor

St Bride's House

10 Salisbury Square

London EC4Y 8EH

27 December 2017

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Year ended 30 June 2017

 
 
                                                     2017          2016 
                                      Notes           GBP           GBP 
 
 
 
 Administrative expenses              6       (1,515,868)   (1,096,658) 
 Share based payment                  19                -      (31,714) 
 
 Total administrative expenses                (1,515,868)   (1,128,372) 
 
 Finance expense                      6          (86,753)       (2,078) 
 Finance income                       6               430         2,759 
 
 Loss before tax                              (1,602,191)   (1,127,691) 
 Taxation                             9                 -             - 
 
 Loss for the year                            (1,602,191)   (1,127,691) 
 
   Other comprehensive loss 
 
   Items that may be reclassified 
   subsequently to profit and 
   loss: 
 Exchange translation differences 
  on foreign operations                           158,061     1,762,673 
 
 Total comprehensive (loss)/income 
  for the year attributable 
  to equity holders of the 
  parent company                              (1,444,130)       634,982 
 
 
 Loss per ordinary share 
 Basic and diluted (pence)            10          (0.88)p       (0.75)p 
 
 

The note on page 34to 60 form part of these of financial statements

All amounts are derived from continuing operations.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 30 June 2017

Company No. 02401127

 
 
                                               2017          2016 
                                Notes           GBP           GBP 
Assets 
Non-current assets 
Intangible assets               11a       1,390,267    11,957,768 
Development assets              11b      11,003,391             - 
Property, plant and equipment   12          491,553        91,242 
 
                                         12,885,211    12,049,010 
 
Current assets 
Trade and other receivables     14          417,078        52,569 
Cash and cash equivalents       15          154,969     1,014,354 
 
                                            572,047     1,066,923 
 
Total assets                             13,457,258    13,115,933 
 
Liabilities 
Current liabilities 
Trade and other payables        17          947,860       537,819 
 
Total current liabilities                   947,860       537,819 
Non current liabilities 
Deferred tax                    16        2,275,314     2,226,035 
 
Total non current liabilities             2,275,314     2,226,035 
 
Total liabilities                         3,223,174     2,763,854 
 
Net assets                               10,234,084    10,352,079 
 
Equity 
Share capital                   18       21,556,030    21,310,951 
Share premium                   18       22,841,009    21,759,953 
Share based payment reserve     19           84,500        84,500 
Merger reserve                            1,824,000     1,824,000 
Translation reserve                       1,657,248     1,499,187 
Retained earnings                      (37,728,703)  (36,126,512) 
 
Total equity                             10,234,084    10,352,079 
 
 

The financial statements were approved by the Board of Directors and authorised for issue on 27 December 2017 and were signed on its behalf by

M A Borrelli

Executive Chairman

CONSOLIDATED STATEMENT OF CASH FLOW

Year ended 30 June 2017

 
 
                                            2017         2016 
                                             GBP          GBP 
Cash flows from operating 
 activities 
Loss before tax                      (1,602,191)  (1,127,691) 
Adjustments to reconcile 
 net losses to cash utilised 
 : 
Amortisation of exploration 
 and evaluation assets                   102,443       98,870 
Depreciation of property, 
 plant and equipment                      28,775       39,604 
Finance income                             (430)      (2,759) 
Share based payments                           -       31,714 
 
Operating cash outflows before 
 movements in working capital        (1,471,403)    (960,262) 
Changes in: 
Trade and other receivables            (364,509)      401,401 
Trade and other payables                 410,495    (211,032) 
 
Net cash outflow from operating 
 activities                          (1,425,417)    (769,893) 
 
Investing activities 
Interest received                            430        2,759 
Purchases of property, plant 
 and equipment                         (428,886)     (67,605) 
Disposals of property, plant 
 and equipment                                 -       18,095 
Purchases of development 
 and E&E assets                        (328,049)    (411,054) 
 
Net cash outflow from investing 
 activities:                           (756,505)    (457,805) 
 
Cash flows from financing 
 activities 
Proceeds from issue of shares 
 and warrants                          1,384,455    1,559,724 
Share issues costs                      (58,320)     (78,923) 
 
Net cash inflow from financing 
 activities                            1,326,135    1,480,801 
 
Net (decrease)/increase in 
 cash and cash equivalents             (855,787)      253,103 
Effect of foreign exchange 
 rate changes                            (3,598)     (24,630) 
Cash and cash equivalents 
 at beginning of year                  1,014,354      785,881 
 
Cash and cash equivalents 
 at end of year                          154,969    1,014,354 
 
 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Year ended 30 June 2017

 
                                 Share       Share     Share     Merger  Translation      Retained        Total 
                               capital     premium     based    reserve      reserve      earnings       equity 
                                                     payment 
                                                     reserve 
                                   GBP         GBP       GBP        GBP          GBP           GBP          GBP 
                      ---------------- 
As at 1 July 
 2015                       20,892,288  20,697,815    52,786  1,824,000    (263,486)  (34,998,821)    8,204,582 
Total comprehensive 
 profit for 
 the year                            -           -         -          -    1,762,673   (1,127,691)      634,982 
 
Issue of shares                418,663   1,141,061         -          -            -             -    1,559,724 
Share issue 
 costs                               -    (78,923)         -          -            -             -     (78,923) 
Share based 
 payment                             -           -    31,714          -            -             -       31,714 
 
As at 30 June 
 2016                       21,310,951  21,759,953    84,500  1,824,000    1,499,187  (36,126,512)   10,352,079 
Total comprehensive 
 loss for the 
 year                                -           -         -          -      158,061   (1,602,191)  (1,444,130) 
 
Issue of shares                245,079   1,139,376         -          -            -             -    1,384,455 
Share issue 
 costs                               -    (58,320)         -          -            -             -     (58,320) 
 
As at 30 June 
 2017                       21,556,030  22,841,009    84,500  1,824,000    1,657,248  (37,728,703)   10,234,084 
 
 

Reserves Description and purpose

Share capital - amount subscribed for share capital at nominal value

Share premium - amounts subscribed for share capital in excess of nominal value

Share based payment reserve - amount arising on the issue of warrants and share options during the year

Merger reserve - amount arising from the issue of shares for non-cash consideration

Translation reserve - amounts arising on re-translating the net assets of overseas operations into the presentational currency

Retained earnings - cumulative net gains and losses recognised in the consolidated income statement

COMPANY STATEMENT OF FINANCIAL POSITION

As at 30 June 2017

Company No. 02401127

 
 
                                               2017          2016 
                                Notes           GBP           GBP 
Assets 
Non-current assets 
Property, plant and equipment   12           12,477         7,601 
Development assets              11b         194,220             - 
Investment in subsidiaries      13       10,202,494    10,031,706 
 
                                         10,409,191    10,039,307 
 
Current assets 
Trade and other receivables     14          381,381        30,850 
Cash and cash equivalents       15           11,205       954,260 
 
                                            392,586       985,110 
 
Total assets                             10,801,777    11,024,417 
 
Liabilities 
Current liabilities 
Trade and other payables        17          930,207       517,325 
 
Total liabilities                           930,207       517,325 
 
Net assets                                9,871,570    10,507,092 
 
Equity 
Share capital                   18       21,556,030    21,310,951 
Share premium                   18       22,841,009    21,759,953 
Share based payment reserve     19           84,500        84,500 
Merger reserve                            1,824,000     1,824,000 
Retained earnings                      (36,433,969)  (34,472,312) 
 
Total equity                              9,871,570    10,507,092 
 
 

The loss for the financial year dealt with in the financial statements of the parent Company was GBP1,961,657 (2016: profit of GBP841,259).

The financial statements were approved by the Board of Directors and authorised for issue on 27 December 2017 and were signed on its behalf by

M A Borrelli

Executive Chairman

COMPANY CASH FLOW STATEMENT

for the year ended 30 June 2017

 
 
                                            2017         2016 
                                             GBP          GBP 
 
Cash flows from operating 
 activities 
(Loss)/profit before tax             (1,961,657)      841,259 
Adjustments to reconcile 
 net losses to cash utilised 
 : 
Foreign exchange gains on 
 foreign subsidiary loans              (175,784)  (1,615,588) 
Depreciation of property, 
 plant and equipment                       6,056        3,724 
Impairment of investment 
 in subsidiaries                       1,000,000            - 
Finance income                             (430)      (2,759) 
Share based payments                           -       31,714 
 
Operating cash outflows before 
 movements in working capital        (1,131,815)    (741,650) 
Changes in: 
Trade and other receivables            (350,531)      151,172 
Trade and other payables                 412,882    (215,905) 
 
Net cash outflow from operating 
 activities                          (1,069,464)    (806,383) 
 
Investing activities 
Interest received                            430        2,759 
Loans to subsidiaries                  (995,004)    (446,738) 
Purchases of property, plant 
 and equipment                          (10,932)      (8,555) 
Disposals of property, plant 
 and equipment                                 -       18,095 
Purchases of development 
 and E&E assets                        (194,220)            - 
 
Net cash outflow from investing 
 activities:                         (1,199,726)    (434,439) 
 
Cash flows from financing 
 activities 
Proceeds from issue of shares 
 and warrants                          1,384,455    1,559,724 
Share issue costs                       (58,320)     (78,923) 
 
Net cash inflow from financing 
 activities                            1,326,135    1,480,801 
 
 
Net (decrease)/increase in 
 cash and cash equivalents             (943,055)      239,979 
Cash and cash equivalents 
 at beginning of year                    954,260      714,281 
 
Cash and cash equivalents 
 at end of year                           11,205      954,260 
 
 

COMPANY STATEMENT OF CHANGES IN EQUITY

Year ended 30 June 2017

 
                           Share  Share premium  Share based     Merger      Retained        Total 
                         capital                     payment    reserve      earnings       equity 
                                                     reserve 
                             GBP            GBP          GBP        GBP           GBP          GBP 
 
 
As at 1 July 
 2015                 20,892,288     20,697,815       52,786  1,824,000  (35,313,571)    8,153,318 
Total comprehensive 
 profit for 
 the year                      -              -            -          -       841,259      841,259 
 
Issue of shares          418,663      1,141,061            -          -             -    1,559,724 
Share issue 
 costs                         -       (78,923)            -          -             -     (78,923) 
Share based 
 payment                       -              -       31,714          -             -       31,714 
 
As at 30 June 
 2016                 21,310,951     21,759,953       84,500  1,824,000  (34,472,312)   10,507,092 
Total comprehensive 
 loss for the 
 year                          -              -            -          -   (1,961,657)  (1,961,657) 
 
Issue of shares          245,079      1,139,376            -          -             -    1,384,455 
Share issue 
 costs                         -       (58,320)            -          -             -     (58,320) 
 
As at 30 June 
 2017                 21,556,030     22,841,009       84,500  1,824,000  (36,433,969)    9,871,570 
 
 

Reserves Description and purpose

Share capital - amount subscribed for share capital at nominal value

   Share premium      - amounts subscribed for share capital in excess of nominal value 

Share based payment reserve - amount arising on the issue of warrants and share options during the year

Merger reserve - amount arising from the issue of shares for non-cash consideration

Translation reserve - amounts arising on re-translating the net assets of overseas operations into the presentational currency

Retained earnings - cumulative net gains and losses recognised in the consolidated income statement

NOTES TO THE ACCOUNTS

Year ended 30 June 2017

   1.         GENERAL INFORMATION 

BMR Group PLC (the 'Company' or "BMR") is incorporated and domiciled in the United Kingdom. The address of the registered office is 35 Piccadilly, London W1J 0DW.

The consolidated financial statements include the financial information of the Company and its subsidiary undertakings (together, the "Group"). The nature of the Group's operations and its principal activity is that of the acquisition, evaluation and development of mineral stockpiles, in particular tailings. The Group's projects are located in Zambia and Portugal.

   2.         ADOPTION OF NEW AND REVISED STANDARDS 

The directors have considered those Standards and Interpretations, which have not been applied in the financial information but are relevant to the Group's operations, that are in issue but not yet effective and do not consider that any will have a material impact on the future results of the Group.

   3.         SIGNIFICANT ACCOUNTING POLICIES 

Basis of preparation

The financial statements have been prepared in accordance with International Financial Reporting Standards ('IFRSs') as issued by the International Accounting Standards Board ('IASB') and as adopted by the European Union ('EU') and those parts of the Companies Act 2006 applicable to companies reporting under IFRSs.

The principal accounting policies adopted are set out below.

The financial statements are presented in Pounds Sterling ("GBP"). For reference the year end exchange rate from Pounds Sterling to US Dollar ("US$") was 1.31 (2016: 1.339) where the functional currency of Zambian subsidiaries are accounted for in US$.

As permitted by Section 408 of the Companies Act 2006, the Company has elected not to present its Income Statement for the year. The Company reported a loss for the financial year ended 30 June 2017 of GBP1,961,657 (2016: profit of GBP841,259).

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries) made up to 30 June each year. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.

The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring accounting policies used into line with those used by the Group. All intra-group transactions, balances, income and expenses are eliminated on consolidation.

Segmental reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision maker has been identified as the Board of Directors.

Going concern

After making enquiries, the Directors have a reasonable expectation that the Company has adequate resources with a combination of its cash balances and expected funding from Jubilee Platinum PLC for the Kabwe plant following completion of its technical review to continue in operational existence for the foreseeable future. In the event that a significant proportion of ACI's funding materialises for the benefit of BMR and before the Company enters into the agreements with Jubilee, BMR would be in a position to consider financing for adding capacity to the processing plant for generating vanadium pentoxide, once ZEMA's approval is obtained, as well as having necessary working capital for the Company. For this reason, they continue to adopt the going concern basis in preparing the financial statements.

The operational requirements of the Company comprise maintaining a Head Office in the UK with a Board comprising two executive directors and one non-executive Director with two consultants for, amongst other things, determining and implementing strategy and managing operations. In addition, the Group has a team in Kabwe, Zambia for establishing facilities for the processing of its tailings into zinc and lead concentrates and a geologist and consultants for the project in Portugal, all under the over-sight of the Board.

The Directors have considered the current level of cash balances, the facility with ACI and the operational requirements of the Group in the UK, Zambia and Portugal over the next 12 months and the commencement of the establishment, and commissioning, of a plant in Zambia in Q2 2018. The Directors believe that the process methodology for the plant in Zambia being developed by the Group working with technical partners is capable of being patented. The Directors expect the plant to be capable of processing at the rate of five tonnes per hour and operating on a 24/7 basis once fully operational.

In the longer term, the Directors expect the Group to generate revenues from its WKS, subject to the successful outcome of engineering studies for its use in high performance cement and subject to ZEMA approval.

In considering the appropriateness of this basis of preparation, the Directors have reviewed the Group and the Company's working capital forecasts. They believe that the funds raised recently, together with further options being considered, will be sufficient for the Group's purposes for a minimum of 12 months from the date of the approval of the financial statements. The financial statements have been prepared on a going concern basis.

However, the Group's ability to continue as a going concern is reliant upon successfully obtaining funds as it moves towards production and to finance its ongoing working capital requirements. The directors have therefore considered this to be an uncertainty which may cast significant doubt about the Group's ability to continue as a going concern. The financial statements do not include the adjustments that would result if the Group was unable to continue as a going concern.

Foreign currencies

The individual financial statements of each Group company are presented in the currency of the primary economic environment in which it operates (its functional currency).For the purpose of the consolidated financial statements, the results and financial position of each Group company are expressed in GBP, which is the functional currency of the Company, and the presentation currency for the consolidated financial statements.

In preparing the financial statements of the individual companies, transactions in currencies other than the functional currency of each Group company ('foreign currencies') are recorded in the functional currency at the rates of exchange prevailing on the dates of the transactions. At each balance sheet date, monetary assets and liabilities that are denominated in foreign currencies are retranslated into the functional currency at the rates prevailing on the balance sheet date. Non-monetary assets and liabilities carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences are recognised in the income statement in the period in which they arise except for exchange differences on monetary items receivable from or payable to a foreign operation for which settlement is neither planned nor likely to occur, which form part of the net investment in a foreign operation, and which are recognised in the foreign currency translation reserve and recognised in the income statement on disposal of the net investment.

For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group's foreign operations are translated at exchange rates prevailing on the balance sheet date. Income and expense items are translated at the average exchange rates for the period, unless exchange rates fluctuate significantly during that period, in which case the exchange rates at the date of transactions are used. Exchange differences arising, if any, are classified as equity and transferred to the Group's translation reserve. Such translation differences are recognised as income or as expenses in the period in which the operation is disposed of.

Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.

Property, plant and equipment

Property, plant and equipment are carried at cost less accumulated depreciation and any recognised impairment loss.

Depreciation and amortisation is charged so as to write off the cost or valuation of assets, other than land, over their estimated useful lives, using the straight-line method, on the following bases:

   Motor vehicles                      25% 
   Other                                       25% 

The gain or loss arising on disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in income.

Impairment of property, plant and equipment (including development assets)

At each balance sheet date, the Group reviews the carrying amounts of its property, plant and equipment to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of the fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value for money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised as income immediately, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

Intangible assets

Intangible assets comprise land use rights, mining licences and exploration & evaluation assets.

The land use rights and mining licences are stated at cost less accumulated amortisation and impairment losses. They are amortised using the straight line basis over the unexpired period of the rights.

Exploration and evaluation costs

All costs of E&E are initially capitalised as E&E assets. Payments to acquire the legal right to explore, costs of technical services and studies, seismic acquisition, exploratory drilling and testing are capitalised as intangible E&E assets.

The Group applies the full cost method of accounting for E&E costs, having regard to the requirements of IFRS 6 Exploration for and Evaluation of Mineral Resources. Under the full cost method of accounting, costs of exploring for and evaluating mineral resources are accumulated by reference to appropriate cost centres being the appropriate licence area, but are tested for impairment on a cost pool basis as described below.

E&E assets comprise costs of (i) E&E activities that are ongoing at the balance sheet date, pending determination of whether or not commercial reserves exist and (ii) costs of E&E activities associated with adding to the commercial reserves of an established cost pool, did not result in the discovery of commercial reserves.

Such costs include directly attributable overheads, including the depreciation of property, plant and equipment utilised in E&E activities, together with the cost of other materials consumed during the exploration and evaluation phases.

Costs incurred prior to having obtained the legal rights to explore an area are expensed directly to the income statement as they are incurred.

Treatment of E&E assets at conclusion of appraisal activities

Intangible E&E assets related to each exploration licence/prospect are carried forward, until the existence (or otherwise) of commercial reserves has been determined. If commercial reserves have been discovered, the related E&E assets are assessed for impairment on a cost pool basis as set out below, and any impairment loss of the relevant E&E assets is then reclassified as development and production assets.

Development assets

Cost is the fair value of consideration required to acquire and develop the asset and includes the purchase price, acquisition of mineral rights, costs directly attributable to bring the asset to its location and condition necessary for it to be capable of operating in the manner intended by management, the initial estimate of any decommissioning obligation and, for assets that take a substantial period of time to get ready for their intended use, borrowing costs.

Development assets are amortised to their residual values using the unit of production method when the products are ready for sale or use. In the event that the expected future economic benefits are no longer probable of being recovered, the development assets are written down to its recoverable amount.

Impairment of assets

E&E assets are assessed for impairment when facts and circumstances suggest that the carrying amount may exceed its recoverable amount. Such indicators include, but are not limited to, those situations outlined in paragraph 20 of IFRS 6 Exploration for and Evaluation of Mineral Resources and include the point at which a determination is made as to whether or not commercial reserves exist.

Where there are indications of impairment, the E&E assets concerned are tested for impairment. Where the E&E assets concerned fall within the scope of an established full cost pool, the E&E assets are tested for impairment together with all development and production assets associated with that cost pool, as a single cash generating unit.

The aggregate carrying value is compared against the expected recoverable amount of the pool, generally by reference to the present value of the future net cash flows expected to be derived from production of commercial reserves. Where the E&E assets to be tested fall outside the scope of any established cost pool, there will generally be no commercial reserves and the E&E assets concerned will generally be written off in full.

Any impairment loss is recognised in the income statement as additional depreciation and amortisation, and separately disclosed.

The Group considers the whole of Zambia to be one cost pool and therefore aggregates all Zambian assets for the purpose of determining whether an impairment of E&E assets has occurred.

Investment in subsidiaries

In the Company's financial statements, investment in subsidiaries are stated at cost and reviewed for impairment if there are any indications that the carrying value may not be recoverable.

Financial instruments

Recognition of financial assets and financial liabilities

Financial assets and financial liabilities are recognised on the Group's balance sheet when the Group becomes a party to the contractual provisions of the instrument.

De-recognition of financial assets and financial liabilities

The Group derecognises a financial asset only when the contractual rights to cash flows from the asset expire; or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset and an associated liability for the amount it June have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received. The Group derecognises financial liabilities when the Group's obligations are discharged, cancelled or expired.

Trade and other receivables

Trade and other receivables are measured at initial recognition at fair value, and are subsequently measured at amortised cost less any provision for impairment.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash with three months or less remaining to maturity and are subject to an insignificant risk of changes in value.

Impairment of financial assets

The Group assesses at each reporting date whether there is objective evidence that a financial asset or a group of financial assets is impaired. In the case of a financial asset classified as available for sale, a significant or prolonged decline in the fair value of the financial asset below its cost is considered as an indicator that the financial asset is impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss - measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit or loss - is removed from equity and recognised in the income statement. Impairment losses recognised in the income statement on financial assets are not reversed through the income statement.

Trade and other payables

Trade and other payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest rate method.

Provisions

Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic resource will result and that outflow can be reliably measured.

Rehabilitation

Provisions are made for the estimated rehabilitation costs relating to areas disturbed during exploration activities up to reporting date but not yet rehabilitated. Changes in estimate are dealt with on a prospective basis as they arise.

Share-based payments

The Group has applied IFRS 2 Share-based Payment for all grants of equity instruments.

The Group issues equity-settled share-based payments to its employees. Equity-settled share-based payments are measured at fair value at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group's estimate of the shares that will eventually vest.

Fair value is measured using the Black Scholes model. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations. The inputs to the model include: the share price at the date of grant, exercise price expected volatility, risk free rate of interest.

Share capital

Financial instruments issued by the Group are treated as equity only to the extent that they do not meet the definition of a financial liability. The Group's ordinary shares are classified as equity instruments.

For the purposes of the disclosures given in note 18, the Group considers its capital to be total equity. There have been no changes in what the Group considers to be capital since the previous period.

The Group is not subject to any externally imposed capital requirements.

   4.         CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY 

In the application of the Group's accounting policies, which are described in note 3, the Directors are required to make judgements, estimates and assumptions about the carrying amounts of the assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both the current and future periods.

The following are the critical judgements and estimations that the Directors have made in the process of applying the Group's accounting policies and that have the most significant effect on the amounts recognised in the financial statements:

   i)        Impairment of development assets 

Processing operations are large, scarce assets requiring significant technical and financial resources to operate. Their value may be sensitive to a range of characteristics unique to each asset and key sources of estimation uncertainty include mineral reserve estimates, future cash flow expected to arise from the cash-generating unit and a suitable discount rate.

In performing impairment reviews, the Group assesses the recoverable amount of its operating assets principally with reference to fair value less costs of disposal, assessed using discounted cash flow models. There is judgement in determining the assumptions that are considered to be reasonable and consistent with those that would be applied by market participants as outlined above.

The carrying amount of the Group's development assets at 30 June 2017 was GBP11,003,391 (2016: GBP10,552,405). No impairments were made during the year.

The methods and key assumptions in relation to the calculation of the estimates are detailed in note 11.

   ii)       Going concern 

As disclosed in note 3 the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. For this reason, the Company continues to adopt the going concern basis in preparing the financial statements.

   iii)       Provisions for liabilities 

As a result of exploration activities the Group is required to make provision for rehabilitation. Signi cant uncertainty exists as to the amount of rehabilitation obligations which may be incurred due to the impact of possible changes in environmental legislation. Due to the early stage of exploration activity no signi cant damage has been caused and, therefore, no provision has been recognised at 30 June 2017 (2016: GBPnil) in the Group and the Company balance sheets.

   5.         SEGMENTAL REPORTING 

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments and making strategic decision, has been identified as the Board of Directors. The Board of Directors considers there to be only one operating segment, the exploitation and development of mineral resources and only three (2016: two) geographical segments being Zambia, Portugal and the UK.

The geographical split of loss and assets and liabilities is as follows:

 
                                 UK      Zambia   Portugal        Total 
                                GBP         GBP        GBP          GBP 
2017 
 
Loss before tax           (965,366)   (473,722)  (163,103)  (1,602,191) 
 
Non-current assets 
Intangible exploration 
 and evaluation assets      194,220  12,199,438          -   12,393,658 
Property, plant 
 and equipment               12,477     479,076          -      491,553 
 
                            206,697  12,678,514          -   12,885,211 
 
 
 
                                 UK      Zambia        Total 
                                GBP         GBP          GBP 
2016 
 
Loss before tax           (781,818)   (345,871)  (1,127,689) 
 
Non-current assets 
Intangible exploration 
 and evaluation assets            -  11,957,768   11,957,768 
Property, plant and 
 equipment                    7,601      83,641       91,242 
 
                              7,601  12,041,409   12,049,010 
 
 
   6.         LOSS FOR THE YEAR 

The loss for the year has been arrived at after charging / (crediting):

 
                                       2017      2016 
                                        GBP       GBP 
 Depreciation of property, plant 
  and equipment (note 12)            28,775    39,604 
 Amortisation of intangibles        102,443    98,870 
 Operating lease costs (Office 
  rental costs)                      32,234    72,184 
 Staff costs (note 8)               307,309   229,304 
 Share based payment charge               -    31,714 
 Finance charge                      86,753     2,078 
 Finance income                       (430)   (2,759) 
                                   --------  -------- 
 
 
   7.         AUDITORS' REMUNERATION 

The remuneration of the auditors can be analysed as follows:

 
                                                           2017                      2016 
                                                            GBP                       GBP 
 Fees payable to the company's 
  auditor for the audit of the 
  company and group's financial 
  statements                                             23,500                    22,500 
 Fees payable to the company's 
  auditor for other services: 
 Other services relating to VAT 
  advice                                                 39,000                    13,500 
 Other services relating to taxation 
  work                                                    3,675                     2,750 
                                       ------------------------  ------------------------ 
                                                         66,175                    38,750 
                                       ------------------------  ------------------------ 
 
   8.         STAFF COSTS 
 
                                    2017     2016 
                                    Number   Number 
 Directors                          3        3 
 Consultant                         2        2 
 Support staff (including Zambia 
  employees)                        35       31 
                                   -------  ------- 
 The average monthly number of 
  employees                         40       36 
                                   -------  ------- 
 
 
 Their aggregate remuneration 
  comprised:-                    GBP       GBP 
 Fees                            153,012   139,504 
 Wages and salaries              154,297   89,800 
 Share based option charges      -         23,961 
 
                                 307,309   253,265 
                                --------  -------- 
 

Included within staff costs GBP153,012 (2016: GBP139,504) relates to amounts in respect of Directors.

The highest paid director's emoluments were GBP72,000 (2016: GBP64,500)

   9.         TAXATION 
 
                      2017   2016 
                      GBP    GBP 
 Current tax 
 UK corporation tax   -      - 
 Overseas taxation    -      - 
                     -----  ----- 
                      -      - 
                     -----  ----- 
 Deferred tax 
 UK corporation tax   -      - 
 Overseas taxation    -      - 
                     -----  ----- 
                      -      - 
                     -----  ----- 
 

The taxation credit for each year can be reconciled to the loss per the consolidated income statement as follows:

 
                                      2017          2016 
                                      GBP           GBP 
 
 Loss before tax                      (1,602,191)   (1,127,691) 
                                     ------------  ------------ 
 Tax credit at the standard rate 
  of tax in the UK                    320,438       225,538 
 Tax effect of non-deductible 
  expenses                            (32,436)      (27,671) 
 Deferred tax asset not recognized    (288,002)     (197,867) 
                                     ------------  ------------ 
 
   Tax for the year                   -             - 
                                     ------------  ------------ 
 

The standard rate of corporation tax in the UK applied during the year was 20% (2016: 20%).

At 30 June 2017, the Company and Group are carrying forward estimated tax losses of GBP10.7m (2016: GBP9.1m) in respect of various activities over the years. No deferred tax asset was recognized in respect to these accumulated tax losses as there is insufficient evidence that the amount will be recovered in future years.

The Group has incurred indefinitely available tax losses of GBP4.60m (2016: GBP3.99m) to carry forward against future taxable income of the subsidiaries in which the losses arose and they cannot be used to offset taxable profits elsewhere in the Group.

   10.        LOSS PER SHARE 

Basic loss per ordinary share is calculated by dividing the consolidated net loss for the year attributable to ordinary equity holders of the parent company by the weighted average number of ordinary shares outstanding during the year. The calculation of the basic and diluted loss per share is based on the following data:

 
                                        2017          2016 
                                        GBP           GBP 
 Loss before tax 
 Loss for the purpose of basic 
  loss per share being consolidation 
  net loss attributable to equity 
  holders of the Company                1,602,191     1,127.689 
                                       ------------  ------------ 
 
                                        2017          2016 
                                        Number        Number 
 Number of shares 
 Weighted average number of ordinary 
  shares for the purpose of basic 
  loss per shares                       182,267,931   150,964,537 
                                       ------------  ------------ 
 
 
 Loss per ordinary share 
 Basic and diluted                      0.88p         0.75 
                                       ------------  ------------ 
 

At the balance sheet date there were 24,526,029 (2016: 66,392,305) potentially dilutive Ordinary Shares. Potentially dilutive ordinary shares relate to warrants and share options issued to directors, consultants and third parties. In 2017 and 2016, the potential Ordinary shares are anti-dilutive and therefore the diluted loss per share has not been calculated.

   11a.   INTANGIBLE ASSETS 
 
                                  Land      Small        Large      Exploration         Total 
                            use Rights      scale        scale   and evaluation           GBP 
                                   GBP    licence      licence           assets 
                                              GBP          GBP              GBP 
GROUP 
Cost 
At 30 June 2015              2,769,918    499,841    1,696,484        9,292,115    14,258,358 
Additions                            -          -            -          411,054       411,054 
Foreign exchange 
 difference                    303,389    246,985            -        1,373,236     1,923,610 
 
At 30 June 2016              3,073,307    746,826    1,696,484       11,076,405    16,593,022 
 
Additions                            -          -            -          295,069       295,069 
Foreign exchange 
 difference                     93,159     16,533            -          155,917       265,609 
Transfer to development 
 assets                              -          -            -     (11,527,391)  (11,527,391) 
 
At 30 June 2017              3,166,466    763,359    1,696,484                -     5,626,309 
 
Accumulated depreciation 
At 30 June 2015            (1,953,879)  (272,468)  (1,696,484)        (524,000)   (4,446,831) 
Charge for the year           (31,466)   (67,404)            -                -      (98,870) 
Disposals                            -   (89,553)            -                -      (89,553) 
 
At 30 June 2016            (1,985,345)  (429,425)  (1,696,484)        (524,000)   (4,635,254) 
 
Charge for the year           (23,600)   (78,843)            -                -     (102,443) 
Foreign exchange 
 difference                   (15,346)    (6,999)            -                -      (22,345) 
Transfer out                         -          -            -          524,000       524,000 
 
At 30 June 2017            (2,024,291)  (515,267)  (1,696,484)                -   (4,236,042) 
 
Carrying amount 
At 30 June 2017              1,142,175    248,092            -                -     1,390,267 
 
At 30 June 2016              1,087,962    317,401            -       10,552,405    11,957,768 
 
At 30 June 2015                816,039    227,373            -        8,768,115     9,811,527 
 
 

Depreciation of the small scale licence is applied by reference to the period of the licence granted and the large scale licence has been fully impaired.

During the year, the Group incurred capital expenditure of GBP295,000 as an addition to exploration & exploration (E&E) asset, of which the Company paid approximately GBP194,000 associated to the acquisition of Star Zinc. The Group considered these E&E assets to be proven and commercial viable and they are reclassified to development assets.

   11b.   DEVELOPMENT ASSETS 
 
                                  Group  Company 
                                    GBP      GBP 
 
Cost 
At 1 July 2016                        -        - 
Transfer from intangible 
 assets                      11,527,391  194,220 
 
At 30 June 2017              11,527,391  194,220 
 
Accumulated depreciation 
At 1 July 2016                        -        - 
Transfer in                   (524,000)        - 
Foreign exchange                      -        - 
 difference 
 
At 30 June 2017               (524,000)        - 
 
Carrying amount 
At 30 June 2017              11,003,391  194,220 
 
At 30 June 2016                       -        - 
 
 

Incorporated in the development assets is a fair value adjustment of GBP6,885,175 as a result of the acquisition of Enviro Mining Limited on 20 June 2011 and its two subsidiary companies, Enviro Processing Limited and Enviro Props Limited (together "Enviro Group"). The Enviro Group owns the leasehold rights and title to Stand 5187 containing the stockpiles at Kabwe and the contents of the washplant and leachplant tailings. No impairment has been made on the fair value this year on the basis that third party reports and internal evaluation of future income streams allied with the associated production costs generate net present values, using conservative discount rates, which are well in excess of the costs capitalised as development assets in the balance sheet.

 
                                 Net Book 
                                    Value 
                                of Assets    Fair Value 
                                 Acquired    Adjustment   Fair Value 
                                      GBP           GBP          GBP 
Development assets              2,514,728     8,561,678   11,076,406 
Other net assets acquired         295,069             -      295,069 
Foreign exchange difference      (33,616)       189,532      155,916 
                              -----------  ------------  ----------- 
                                2,776,181     8,751,210   11,527,391 
Impairment provision            (274,000)     (250,000)    (524,000) 
                              -----------  ------------  ----------- 
                                2,502,181     8,501,210   11,003,391 
Deferred tax (note 16)                  -   (2,275,314)  (2,275,314) 
 
                                2,502,181     6,225,896    8,728,077 
 
 

On the basis of third party reports incorporating values derived from JORC classifications and internal evaluation of future income streams allied with the associated production costs, net present values, using conservative discount rates, have been generated which are well in excess of this figure and the overall costs capitalised as intangible assets in the balance sheet. The impairment assessment carried out relates to the exploitation and development of mineral resources, as the one cash generating unit ("CGU") representing the only operating segment. The recoverable amount is determined from value in use calculations based on cash flow projections from revenue and expenditure forecasts covering a 5 year period to 2022. The growth rate is assumed to be zero and the level of production is constant on the basis the main plant is assumed to be at the most efficient capacity over the period of extraction., The key assumptions used are as follows:

 
                              2017     2016 
 
 Discount rate                20%      20% 
 
 Prevailing Metal prices** 
  (per tonne) 
 
   *    Zinc                  $2,510   $2,377 
 
   *    Lead                  $3,169   $2,105 
 
 Metal recovery rate from 
  processing as follow: 
 
   *    Zinc                  80%      80% 
 
   *    Lead                  86%      85% 
 
 Estimated monthly tonnage 
  of Zinc and Lead for 
  the main plant (JORC 
  Compliant)                  31,000   29,200 
 

** Prevailing metal prices extracted from London Metal Exchange as at 6 November 2017

The discount rate is based on the specific circumstances of the Group and its operating segments and is derived from its WACC, with appropriate adjustments made to reflect the risks specific to the CGU and to determine the pre-tax rate. In considering the discount rates applying to the CGUs, the directors have considered the relative sizes, risks and the inter-dependencies of its CGUs. No reasonably possible change in a key assumption would produce a significant movement in the carrying value of the CGUs and therefore no sensitivity analysis is presented.

   12.       PROPERTY PLANT AND EQUIPMENT 
 
                           Construction    Land and      Motor 
                            in Progress   Buildings   Vehicles     Other      Total 
                                    GBP         GBP        GBP       GBP        GBP 
 
GROUP 
Cost 
At 30 June 2015                       -      23,707     65,197    63,733    152,637 
Additions                             -           -          -    59,774     59,774 
Disposals                             -           -          -  (36,190)   (36,190) 
Foreign exchange 
 difference                           -      13,355     41,830    11,597     66,782 
 
At 30 June 2016                       -      37,062    107,027    98,914    243,003 
 
Additions                       399,728      12,576          -    14,730    427,034 
Disposals                             -           -          -         -          - 
Foreign exchange 
 difference                           -         820      1,046     1,586      3,452 
 
At 30 June 2017                 399,728      50,458    108,073   115,230    673,489 
 
Accumulated depreciation 
At 30 June 2015                       -           -   (51,810)  (34,903)   (86,713) 
Charge for the 
 year                                 -     (2,613)   (15,760)  (21,231)   (39,604) 
Disposals                             -           -          -    18,095     18,095 
Foreign exchange 
 difference                           -           -   (34,862)   (8,677)   (43,539) 
 
At 30 June 2016                       -     (2,613)  (102,432)  (46,716)  (151,761) 
 
Charge for the 
 year                                 -       (698)    (2,369)  (25,708)   (28,775) 
Disposals                             -           -          -         -          - 
Foreign exchange 
 difference                           -       (454)      (977)        31    (1,400) 
 
At 30 June 2017                       -     (3,765)  (105,778)  (72,393)  (181,936) 
 
 
Carrying amount 
At 30 June 2017                 399,728      46,693      2,295    42,837    491,553 
 
At 30 June 2016                       -      34,449      4,595    52,198     91,242 
 
At 30 June 2015                       -      23,707     13,387    28,830     65,924 
 
 
 
 
                             Other     Total 
                             GBP       GBP 
 
COMPANY 
Cost 
At 30 June 2015            42,532    42,532 
Additions                  8,555     8,555 
Disposals                  (36,190)  (36,190) 
 
At 30 June 2016            14,897    14,897 
 
Additions                  10,932    10,932 
Disposals                  -         - 
 
At 30 June 2017            25,829    25,829 
 
Accumulated depreciation 
At 30 June 2015            (21,667)  (21,667) 
Charge for the year        (3,724)   (3,724) 
Disposals                  18,095    18,095 
 
At 30 June 2016            (7,296)   (7,296) 
 
Charge for the year        (6,056)   (6,056) 
Disposals                  -         - 
 
At 30 June 2017            (13,352)  (13,352) 
 
 
Carrying amount 
At 30 June 2017            12,477    12,477 
 
At 30 June 2016            7,601     7,601 
 
At 30 June 2015            20,865    20,865 
 
 
   13.        INVESTMENT IN SUBSIDIARIES 
 
                               Cost of  Long Term 
                            Investment      Loans        Total 
                                   GBP        GBP          GBP 
COMPANY 
Cost at 30 June 2015         4,676,701  3,292,679    7,969,380 
 
Advance to subsidiary 
 undertakings                        -    446,738      446,738 
Effect of forex exchange 
 rate charges                        -  1,615,588    1,615,588 
 
At 30 June 2016              4,676,701  5,355,005   10,031,706 
 
Advance to subsidiary 
 undertakings                        -    995,004      995,004 
Effect of forex exchange 
 rate charges                        -    175,784      175,784 
Impairment loss            (1,000,000)          -  (1,000,000) 
 
At 30 June 2017              3,676,701  6,525,793   10,202,494 
 
 

The Company had investment in the following subsidiary undertakings at 30 June 2017 and 30 June 2016:

 
                                                        Country of       Ordinary            Ordinary 
                                                    incorporation     Shares              shares 
                                                                       held                held 
Name                Activity and operation                               Company                 Group 
Enviro Mining       Holding Company 
 Limited             Mauritius                                                    100%             100% 
Enviro Processing   Tailings processing 
 Limited             Zambia                                                          -             100% 
Enviro Props        Property holding 
 Limited             Zambia                                                          -             100% 
 

The Group holding of 100% in the Zambian subsidiaries is held as to 99% by Enviro Mining Limited and 1% by a nominee on behalf of the Company.

The Group holding of 100% in the Mauritius subsidiary is held as to 95% by the Company and 5% by a nominee on behalf of the Company.

   14.        TRADE AND OTHER RECEIVABLES 
 
                            Group               Company 
                         2017      2016       2017      2016 
                          GBP       GBP        GBP       GBP 
Group and Company 
Prepayment             34,716    34,955     30,567    30,850 
Other receivables     350,840     2,356    350,814         - 
Vat receivable         31,522    15,258          -         - 
                      417,078    52,569    381,381    30,850 
                    =========  ========  =========  ======== 
 
 

As outlined in note 17, a provision has been made in respect of a VAT assessment received from HM Revenue & Customs ("HMRC").

The fair value of trade and other receivables is not significantly different from the carrying value and none of the balances are past due.

   15       CASH AND CASH EQUIVALENTS 

The Group's cash and cash equivalents as at 30 June 2017 of GBP154,969 (2016: GBP1,014,354) comprise cash at bank and in hand.

The Company's cash and cash equivalents as at 30 June 2017 of GBP11,205 (2016: GBP954,260) comprise cash at bank and in hand.

The Directors consider that the carrying amount of these assets approximates their fair value.

   16.       DEFERRED TAX 

Differences between IFRS and statutory tax rules (in the United Kingdom and elsewhere) give rise to temporary differences between the carrying values of certain assets and liabilities for financial reporting purposes and for income tax purposes.

 
                                    GBP 
Deferred tax liabilities 
At 30 June 2016 and 1 July 
 2016                            2,226,035 
Foreign exchange difference 
 At                                 49,279 
                               ----------- 
At 30 June 2017                  2,275,314 
                               ----------- 
 

The deferred tax liabilities arose on the acquisition of exploration and evaluation assets in 2011. These will be released to the income statement as the fair value of the related exploration and evaluation assets is amortised.

   17.        TRADE AND OTHER PAYABLES 
 
                           Group                Company 
                        2017       2016       2017       2016 
                         GBP        GBP        GBP        GBP 
 
Trade payables       494,328    119,395    494,328    119,395 
Other taxes and 
 social security      10,223          -      7,379          - 
Vat payable          374,350    374,350    374,350    374,350 
Accruals              68,959     44,074     54,150     23,580 
                   ---------  ---------  ---------  --------- 
                     947,860    537,819    930,207    517,325 
                   =========  =========  =========  ========= 
 
 

BMR was de-registered for VAT with effect from 1 August 2015 on the basis there was no effective consideration for any services provided as no invoices had been raised by BMR and issued to its subsidiaries and that management services were not considered supplies for VAT purposes. A provision has been made for GBP374,350 (2016 - GBP374,350) in relation to VAT previously claimed including interest. The Company has appealed and submitted its case for continued registration after having sought professional advice.

   18.        SHARE CAPITAL AND SHARE PREMIUM 
 
                                    2017                           2016 
Issued equity share 
 capital                    Number           GBP           Number           GBP 
Issued and fully 
 paid 
Ordinary shares 
 of GBP0.01 each           198,339,565     1,983,396      173,831,727     1,738,317 
 
Deferred shares 
 of GBP0.009 each        1,346,853,817    12,121,684    1,346,853,817    12,121,684 
Deferred shares 
     of GBP0.01 each        19,579,925       195,799       19,579,925       195,799 
Deferred shares 
 of GBP0.04 each           181,378,766     7,255,151      181,378,766     7,255,151 
                                        ============                   ============ 
                                          21,556,030                     21,310,951 
                                        ============                   ============ 
 

The deferred shares of GBP0.01 each and GBP0.009 each confer no rights to vote at a general meeting of the Company or to a dividend. On a winding-up the holders of the deferred shares are only entitled to the paid up value of the shares after the repayment of the capital paid on the ordinary shares and GBP5,000,000 on each ordinary share.

The deferred shares of GBP0.04 each have no rights to vote or to participate in dividends and carry limited rights on return of capital.

Shares issued during the year:

 
                     Number of    Nominal value   Share Premium 
                       shares 
                                       GBP             GBP 
 At 30 June 
  2015              131,965,451       1,319,654      20,697,815 
 Ordinary shares 
  issued during 
  the year           41,866,276         418,663       1,141,061 
 Share issue 
  costs                       -               -        (78,923) 
 At 30 June 
  2016              173,831,727       1,738,317      21,759,953 
                   ------------  --------------  -------------- 
 Ordinary shares 
  issued during 
  the year           24,507,838         245,079       1,139,376 
 Share issue 
  costs                       -               -        (58,320) 
 At 30 June 
  2017              198,339,565       1,983,396      22,841,009 
                   ------------  --------------  -------------- 
 
 
 Shares Issued                       Number of Shares   Nominal Value   Share Premium 
 28 October 2015 at GBP0.01 each           18,750,000         187,500         562,500 
 28 February 2016 at GBP0.01 each          13,817,453         138,175         276,349 
 22 April 2016 at GBP0.01 each              9,298,823          92,988         302,212 
 
 At 30 June 2016                           41,866,276         418,663       1,141,061 
 
 28 October 2016 at GBP0.01 each            9,253,731          92,537         527,463 
 16 February 2017 at GBP0.01 each           5,920,774          59,208         355,246 
 28 June 2017 at GBP0.01 each               9,333,333          93,334         256,667 
 
 At 30 June 2017                           24,507,838         245,079       1,139,376 
 
 
   19.           SHARE BASED PAYMENTS 

Equity settled share-based payments

The Company has a share option scheme for directors, employees and consultants.

 
                                  30 June                                           30 June 
                                   2016 or     Cancelled     Granted   Exercised     2017 or 
                                   date of         or         during     during      date of 
                                 appointment     Lapsed      the year   the year   resignation 
Name               Price  Note        Number        Number     Number     Number        Number 
-----------------  -----  ----  ------------  ------------  ---------  ---------  ------------ 
SHARE OPTIONS 
M A Borrelli        6p     A       8,210,243             -          -          -     8,210,243 
J N Hawke           6p     A       3,926,637             -          -          -     3,926,637 
Consultants         6p     A       5,246,292             -          -          -     5,246,292 
Total share 
 options                          17,383,172             -          -          -    17,383,172 
SHARE WARRANTS 
 
Novum Securities    28p    B       7,142,857             -          -          -     7,142,857 
Others              7p     C      41,866,276  (45,199,233)  9,253,731  5,920,774             - 
 
  Total Share 
  Warrants                        49,009,133  (45,199,233)  9,253,731  5,920,774     7,142,857 
                                ============  ============  =========  =========  ============ 
 
  Total Share 
  Options and 
  Warrants                        66,392,305  (45,199,233)  9,253,731  5,920,774    24,526,029 
                                ============  ============  =========  =========  ============ 
 

Note A - Exercisable at any time before 12 June 2020

Note B - Exercisable at any time before 7 July 2017

Note C - Exercisable in the 42 days following publication of BMR's results for the year ending 30 June 2016.

Share Options

There were no share options granted in the year and as a result the share option charge was nil (2016: GBP31,714).

   20.        FINANCIAL INSTRUMENTS 

Capital risk management

The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern, while maximising the return to shareholders.

The capital resources of the Group comprises issued capital, reserves and retained earnings as disclosed in the Consolidated Statement of Changes in Equity. The Group's primary objective is to provide a return to its equity shareholders through capital growth. Going forward the Group will seek to maintain a yearly ratio that balances risks and returns of an acceptable level and also to maintain a sufficient funding base to the Group to meet its working capital and strategic investment needs.

Categories of financial instruments

 
                                      2017        2016 
Group                                  GBP         GBP 
Financial assets 
   Cash and cash equivalents         154,969    1,014,354 
   Other receivables classified 
    as loan 
   and receivables at amortised 
    cost                             382,362       17,614 
                                   ---------  ----------- 
                                     537,331    1,031,968 
                                   =========  =========== 
 
Financial liabilities classified 
 as held at amortised cost 
   Trade and other payables          937,637      537,819 
                                   ---------  ----------- 
                                     937,637      537,819 
                                   =========  =========== 
Company 
Financial assets 
   Cash and cash equivalents          11,205      954,260 
   Other receivables classified 
    as loan 
   and receivables at amortised 
    cost                             350,814            - 
                                   ---------  ----------- 
                                     362,019      954,260 
                                   =========  =========== 
 
Financial liabilities classified 
 as held at amortised cost 
   Trade and other payables          922,828      517,325 
                                     922,828      517,325 
                                   =========  =========== 
 
 

Fair value of financial assets and liabilities

Fair value is the amount at which a financial instrument could be exchanged in an arm's length transaction between informed and willing parties, other than a forced or liquidation sale and excludes accrued interest. Where available, market values have been used to determine fair values.

Fair value hierarchy

The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments which are measured at fair value by valuation technique:

Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities

Level 2: Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly;

Level 3: Techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data

Management assessed that the fair values of cash and short-term deposits, trade receivables, trade payables, bank overdrafts and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

The Directors' assessment of the development assets at fair value, are disclosed in note 11b.

Financial risk management objectives

Management provides services to the business, co-ordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Group through internal risks reports which analyse exposures by degree and magnitude of risks. These risks include foreign currency risk, credit risk, liquidity risk and cash f low interest rate risk. The Group does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.

As the Group has no committed borrowings, the Group is not exposed to any risks associated with fluctuations in interest rates on loans. Fluctuation in interest rates applied to cash balances held at the balance sheet date would have minimal impact on the Group.

Foreign exchange risk and foreign currency risk management

Foreign currency exposures are monitored on a monthly basis. Funds are transferred between the Sterling and US Dollar accounts in order to minimise foreign exchange risk. The Group holds the majority of its funds in Sterling.

The carrying amounts of the Group's and Company's foreign currency denominated financial assets and monetary liabilities at the reporting date are as follows:

 
                Financial liabilities      Financial assets 
                      2017        2016       2017       2016 
Group                  GBP         GBP        GBP        GBP 
 
US Dollars           2,844           -    175,885    180,143 
 
Company 
US Dollars               -           -        573    102,434 
 
 

Foreign currency sensitivity analysis

The Group is exposed primarily to movements in Sterling against the US Dollar. Sensitivity analyses have been performed to indicate how the profit or loss would have been affected by changes in the exchange rate between the US Dollar and Sterling. The analysis is based on a weakening and strengthening of Sterling by 10 per cent against the US Dollar in which the Group has assets and liabilities at the end of each respective period.

A movement of 10 per cent reflects a reasonably possible sensitivity when compared to historical movements over a three to five year timeframe. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a ten per cent change in foreign currency rates.

A positive number below indicates an increase in profit where the US Dollar strengthens ten per cent. against Sterling. For a ten per cent. weakening of the US Dollar against Sterling, there would be an equal and opposite impact on the profit, and the balance below would be negative.

The following table details the Group's sensitivity to a ten per cent. strengthening in the US Dollar against Sterling

 
 
                                       2017        2016 
                                       GBP         GBP 
 
(Decrease)/increase in income 
 statement and net assets (US $)     (16,108)    (16,751) 
 
 

Credit risk management

Credit risk refers to the risk that a counter party will default on its contractual obligations resulting in financial loss to the Group. The Group does not have any significant credit risk exposure on trade receivables.

The Group makes allowances for impairment of receivables where there is an identified event which, based on previous experience, is evidence of a reduction in the recoverability of cash f lows.

The credit risk on liquid funds (cash) is considered to be limited because the counterparties are financial institutions with high credit ratings assigned by international credit-rating agencies.

The carrying amount of financial assets recorded in the financial statements represents the Group's maximum exposure to credit risk.

Liquidity risk management

Liquidity risk is the risk that the Group and Company will not be able to meet its financial obligations as they fall due. Management monitor forecasts of the Group's liquidity reserve, comprising cash and cash equivalent, on the basis of expected cash flow. At 30 June 2017, the Group held cash and cash equivalent of GBP154,969 (2016: GBP1,014,354) and the directors assess the liquidity risk as part of their going concern assessment (see note 3)

Liquidity risk management (continued)

The Group and Company aim to maintain appropriate cash balances in order to meet its liabilities as they fall due.

Maturity analysis

 
Group                                                                  Between      Between         Between 
 2017                                          On              In       1 and 6      6 and 12        1 and 
                                                                                                       3 
                        Total         demand          1 month           months        months           years 
                             GBP              GBP             GBP           GBP           GBP            GBP 
 
  Trade and 
  other payables      947,860          315,797            188,754        44,959       398,350              - 
Company                                                                Between      Between         Between 
 2017                                          On              In       1 and 6      6 and 12        1 and 
                                                                                                       3 
                        Total         demand          1 month           months        months           years 
                             GBP              GBP             GBP           GBP           GBP            GBP 
                   =============  ===============  ==============  ============  ============  ============= 
 
  Trade and 
  other payables      930,207          315,797            185,910        30,150       398,350              - 
 
  Group 
  2016 
                                                                        Between       Between       Between 
                                      On                       In       1 and 6      6 and 12         1 and 
                          Total        demand             1 month        months       months             3 
                                                                                                       years 
                             GBP              GBP             GBP           GBP           GBP            GBP 
Trade and 
 other payables       537,819          35,819             83,576         44,074       374,350              - 
 
  Company 
2016                                                                   Between      Between         Between 
                                               On              In       1 and 6      6 and 12        1 and 
                                                                                                       3 
                        Total         demand          1 month           months        months           years 
                             GBP              GBP             GBP           GBP           GBP            GBP 
Trade and 
 other payables       517,325          35,819             83,576         44,074       374,350              - 
                   -------------  ---------------  --------------  ------------  ------------  ------------- 
 
   21.       OPERATING LEASE ARRANGEMENT 

At the balance sheet date, the Group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

 
 
                        2017    2016 
                         GBP     GBP 
 Land and buildings 
 Within one year       5,250   5,250 
 Within 2-5 years          -       - 
                      ------  ------ 
 Total                 5,250   5,250 
                      ======  ====== 
 
 

Operating lease payments represent rentals payable by the Company for its office properties.

   22.       RELATED PARTY TRANSACTIONS 

Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note.

Directors' transactions

Transactions with the Directors are shown in the Directors' Report.

Remuneration of key management personnel

The key management personnel of the Group are considered to be the Directors. Details of their remuneration are covered in note 8 and the Report of the Remuneration Committee within the Corporate Governance section.

   23.              CONTINGENT LIABILITIES AND PROVISIONS 

BMR is currently de-registered for VAT with effect from 1 August 2015 on the bases there was no effective consideration for any services provided as no invoices had been raised by BMR and issued to its subsidiaries and that management services were not considered as supplies for VAT purposes. The Company has received assessments and has provided for GBP374,500 (2016: GBP374,500) in back VAT claimed including interest. . The Company has appealed and submitted its case for continued registration after having sought professional advice. The Directors do not expect any resulting assessment to be materially different from this provision taking into account consideration of any possible compliance penalty.

   24.             EVENTS AFTER THE REPORTING DATE 

On 4 September 2017 the Company, on behalf of its newly incorporated wholly owned subsidiary Enviro Zambia, entered in to an agreement with Bushbuck Resources Limited to complete the acquisition of Star Zinc for a cash consideration of $1,000,000 of which $130,000 has already been paid. The first tranche of the remaining consideration of $400,000 was paid on 4 September 2017 and a further $300,000 has now been paid with the remaining balance of $170,000 being due by 28 February 2018.

On 14 November 2017, the Company announced that it had informed Mineralia-Minas, Geotecnia E Construcoes, LDA ("Mineralia") that it intended to exercise its option to acquire an 80% interest in the 327 sq km Ester exploration licence having fulfilled its EUR140,000 (c.GBP120,000) financial obligation. Upon exercise of the option, the Ester licence will be transferred into a new joint venture company to be incorporated in Portugal and owned as to 80% by BMR and as to 20% by Mineralia after which BMR is contracted to pay deferred consideration to Mineralia of EUR100,000 (c.GBP90,000) upon the application and granting of a preliminary exploitation licence by no earlier than 2019 and EUR1,000,000 (c.GBP880,000) upon the application and granting of a definitive exploitation licence thereafter. T

On 20 November 2017, the Company issued 40,000,000 ordinary shares of 1p each at a price of 2p per share raising gross proceed of GBP800,000.

This information is provided by RNS

The company news service from the London Stock Exchange

END

FR BIBDDIBDBGRR

(END) Dow Jones Newswires

December 28, 2017 02:00 ET (07:00 GMT)

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